The Expansion Of The FEIE Is The Strengthening Of Citizenship Tax (The Beyer Bill, part 1)

SEAT – The Acronym For “Stop Extraterritorial American Taxation”

What is pure residence-based taxation and why should be the only goal that matters?

What the United States calls “citizenship-based taxation” is actually:

The United States imposing worldwide taxation on individuals, on the non-US source income of individuals who do not live in the United States and are tax residents of other countries.

In other words, if you are a US citizen you are subject to the full force of the Internal Revenue Code (tax and reporting) even when you live outside the United States. This is unfair to the affected individuals and to the countries where those affected individuals reside. Through citizenship-based taxation the United States has created a “fiscal prison” which makes it very difficult for US citizens to live productive and financially viable lives outside the United States.

SEAT was formed to provide education and advocacy in support of replacing US citizenship-based taxation with pure residence-based taxation. Pure residence-based taxation is the standard that used in almost every other country in the world.

SEAT is committed to the principle that the goal should be pure residence-based taxation. To put it simply, citizenship should not be a sufficient condition for being a tax resident of the United States.

Cira December 2018 – Congressman Holding (A Republican)

My response in 2018 …

In 2018 Congressman Holding (a Republican) introduced the “Tax Fairness For Americans Abroad Act“. Although a step forward, the Holding bill did NOT propose pure residence-based taxation. Rather the Holding bill (1) retained US citizenship-based taxation and (2) proposed expanding the forms and amounts of non-US income that would be excluded from US income for tax purposes. This was done by expanding the 911 Foreign Earned Income Exclusion. In other words, the Holding bill proposed retaining US citizenship-based taxation while providing an enhanced “carve out” for non-US source income. In other words, a practical help but not an end to the problems. The Holding bill did NOT receive sufficient support and was not reintroduced.

My 2018 thoughts are reflected in this post.

November 2021 – Congressman Beyer (A Democrat)

My thoughts in 2021

In November of 2021 Congressman Beyer (a Democrat) drafted (H.R. 6057) his “Tax Simplification For Americans Abroad Act“.

My current thoughts and analysis of the bill are reflected in this post.

The Holding Bill and the proposed Beyer bill are actually the same

In both cases the proposed legislation is NOT to end citizenship-based taxation, but rather to simply expand the FEIE (“Foreign Earned Income Exclusion“). Legislation that fails to end US citizenship-based taxation is not a long term solution and is therefore not acceptable. The US must stop defining as US tax residents individuals who do not live in the United States.

To date the response of both Republicans and Democrats has been to retain citizenship taxation and enhance the FEIE.

The response of ALL Americans abroad should be to withdraw support from ANY political party that does not publicly support and advocate for pure-residence based taxation!

Pure residence-based taxation is the ONLY solution that solves the problem for ALL people ALL the time!

John Richardson

One thought on “The Expansion Of The FEIE Is The Strengthening Of Citizenship Tax (The Beyer Bill, part 1)

  1. Excellent points. Unfortunately, the Dems have advanced the concept of pay “what is owed”, which is an ancient Rome dogma. Rome imposed predatory taxation and expected every bit of it to be paid back. Jesus went up against the very oligarchs that oppressed the people with high taxation. He paid the price for standing up to the Dems and Republicans of his time. It was only until Constantine “went Christian” did the Jesus message take root because it was a message that turned its back on Rome’s punitive “all debts must be paid.” Thusly, Rome’s power collapsed.

    What has stood the test of time and endured famines, droughts, Dark Ages, etc., was Rome’s oligarchs demand for full payment of onerous taxes. Jesus original message of “forgive them for their debts”, was twisted to mean “forgive them for their sins”, is a blasphemous interpretation which has had dire consequences.

    Like Marie Antoinette‘s, “let them eat cake” statement and Roman autocrats before her, the Dems and Republicans don’t give a damn about the oppression they impose. Their sole interests are preserving power and aligning legislation that benefits the uber rich, which means shaking as many expats down as possible. Kinda like a Roman Coliseum event where expats are fed to lions in order to distract the public from their own misery.

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